Higher Education: The End Is Not Nigh

Five years ago, I laughed at Alex Tabarrok for worrying that online instruction would put traditional colleges - and traditional professors like us - out of business. He's still worried:

[U]niversities will move to a superstar market for teachers in which the
very best teachers use on-line instruction and TAs to teach thousands
of students at many different universities. The full online model is
not here yet but I see an increasing amount of evidence for the
superstar model of teaching.

[...]

It's true that the university equilibrium has lasted a long time but that doesn't mean it can't break down very quickly.

I don't rule out marginal changes, but Alex is being paranoid. What makes me so sure? Simple: If he were right, then videotape would have put college professors out of business thirty years ago! It's been technologically feasible for all students to learn from superstar teachers for decades. A little has happened at the margin. But not much. (And if you think online instruction is much closer than VHS to a real classroom experience because faculty-student interaction is important, remember how often professors lecture to classes of hundreds of students, only a tiny handful of whom participate).

Alex admits that "measurement" and "prestige" problems are holding back online instruction, but suggests that these barriers will soon be overcome:

But how long can we expect the inability to measure to protect academia
when there are big profits to be made? Robin Hanson would argue that
most of what is going on is signaling, i.e. that prestige is
what is being bought and sold and not prestige as a proxy for some
other measure of quality. No doubt there is some truth to that but
there are plenty of fields, dentistry, engineering, computer science
where measurable quality matters as well.

Alex doesn't consider what I'll call the Weirdo/Loser problem. Suppose you're an employer, and you're trying to decide who to interview. What do you think when you see that a seemingly capable candidate "went" to the University of Phoenix? Maybe you'll still give him a chance. If you need someone good, however, you'll almost certainly ask yourself, "If he's really so good, why didn't he just go to a regular university? What's his problem? Is he weird, lazy, or what?" Then you'll throw his resume in the trash.

When Alex started worrying about the competition of online instruction, I asked him: "How would you react if your son told you he wanted to 'go' to the University of Phoenix?" Unless my memory fails me, Alex didn't deny that he'd strongly discourage him. Why? Because Alex knew that his son would be closing a lot of doors for himself. I'm confident that most parents of kids who can get into traditional colleges would have the same reaction. As long as they do, traditional colleges will not just survive, but thrive, because college attendance will remain a powerful signal that you're not a weirdo or a loser.

Let me conclude with a bet. I bet at even odds that 10 years from now, the fraction of American 18-24 year-olds enrolled in traditional four-year colleges will be no more than 10% (not 10 percentage-points!) lower than it is today. If Alex really believes that a sudden breakdown in the university equilibrium is reasonably likely, he should take my bet. Will he?

Comments and Sharing

I think a breakdown in the traditional university system might come about if a couple billion people in China and India become wealthy enough to support widespread education in technical fields where content actually matters. Would this happen by a vast expansion of the traditional university system, or by something new? The latter seems reasonably likely to me. And once masses of people educated the new way are obviously performing very well, the old way may not be able to survive. I'd then expect universities to either disappear, or become much more elite institutions, in which the advantages of personal interaction really are exploited.

Write the check now Bryan. Schools are already using online education as a way to lower some students' fees. I have a buddy who runs a distance ed program at a school in TN. He is always looking for people who want to teach core curriculum from a distance. His shining star example is a math teacher in New Mexico who used to distance teach part time, but has been so successful that he quit his day job to do it full time. They also got more busy this summer, as students wanted to take units without living on campus.

I think better terms for the bet could be arrived at if you picked a decent sized sample of middling and lower tier four year colleges and universities and looked for changes in the student/teacher ratio.

"(And if you think online instruction is much closer than VHS to a real classroom experience because faculty-student interaction is important, remember how often professors lecture to classes of hundreds of students, only a tiny handful of whom participate)"

This is a ridiculous quote- there many differences between video from the 80s and tech available today. First VHS would have been worthless for large classes- a 19 in color TV is simply not good enough to display any amount of diagrams, equations, examples ect for any sizable group. Were not even talking 300 student classes- were talking 30 students being around the break line for any kind of usefulness.

secondly a VHS has to be prepared ahead of time and shipped - which means any class that would discuss current events would be at best a week behind. Imagine taking an economics class with Mankiw the days after Lehman collapsed and instead of having a topical discussion you got a VHS tape on the history of the trade cycle- talk about a let down.

Lastly the "few" students who interact with their professors are often the best and brightest- these are the ones who make teaching more rewarding in a lot of ways for many- ESPECIALLY the superstar teachers.

Isn't the weirdo effect overrated? A few years back only "nerds" registered for internet dating. Now, its more acceptable. If education becomes expensive enough for more people to try alternatives, wouldn't more people try alternative models?

You and Alex both talk about job markets and post-secondary education as though they are competitive! The problem - specifically, that the product supplied by most Universities is pitiful - is only tangentially related to signaling. If the US consisted of students and private sector employers, and their goal was to signal and sort themselves efficiently, they would find a way, and it would not involve the degree-factory credentialism of contemporary higher education.

In the tech sector, one of the few remaining bastions of free-market enterprise in your once-great country, my impression is that this is exactly what happens. No one cares where you went. Can you code? Can you answer interview questions that are IQ tests in all but name? And this is despite the fact that engineering and programming are some of the most practical fields of study.

The outcome of this bet will have nothing to do with the technical feasibility of online courses, and everything to do with the ability of the Americans to understand the self-imposed schlerosis she subjects herself to by requiring everyone from Doctors to Interior Decorators to obtain state-sanctioned licensing, generally requiring a half decade or more behind the ivied bars of our higher education system.

I'm cheering for Alex. But in a ten-year time frame, I'm sad to say I'll take some of that action.

Alex also neglects that education is about signaling and knwoledge but is also about social networks. Students take advantage from interaction with their teachers but also with their peers, who cause emulation but also provide them useful in their future career.
So, one way or another, you have to put students together. And I don't believe that Internet is enough yet.

My belief that our technology could replace the current educational approach aside, I have to agree with Zdeno. There is enough of a racket and barriers to entry erected in most educational fields, that we might never fully transition to such a system where most schooling is done through electric means.

"Isn't the weirdo effect overrated? A few years back only "nerds" registered for internet dating. Now, its more acceptable. If education becomes expensive enough for more people to try alternatives, wouldn't more people try alternative models? "

Nerds never registered for internet dating, they got married on WoW or Everquest. All joking aside, with people being highly mobile these days, that education wouldn't follow suit doesn't compute to me.

I think both views are correct. Online classes will be taking over AND the traditional college system will flourish...once traditional colleges move toward a mix of online classes (primarily for gen ed and other beginning classes) and traditional classes for upper level.

You get both the cost savings of online classes AND the signal that you went to a traditional university (along with the consumption value of a university setting).

We could have the students cluster in one spot with a remote teacher in another, so they get peer interaction. I'm not sure how that fits in with Bryan's bet, but it sounds like Alex's "superstar" approach, modulo the local TA.

The comments so far seem to be from people who are not familiar with online education. I am a department chair at a leading online university with 100,000 students at doctoral, masters and bachelor level (no, its not Phoenix).

Mostly our students are part-time, being working adults, most over 25 and many over 30. We do not compete with face-to-face universities, because our students are working fulltime. We are growing at about 25% a year.

Bryan wrote:
I bet at even odds that 10 years from now, the fraction of American 18-24 year-olds enrolled in traditional four-year colleges will be no more than 10% (not 10 percentage-points!) lower than it is today.

I just want to point out something about the math in this bet that would cause me to take it if I were Alex. It's not just that Bryan is biasing it against himself with his percent instead of percentage points. It's also that there can be other factors causing the fraction to drop. I don't have the energy to check--it's not my bet and so I'm not doing due diligence--but I would guess that about 30% of 18-24 year olds are in 4-year colleges. If that fell to less than 27%, for whatever reason, Alex would win.
Best,
David

It depends on cost. That is, the ratio of the median household income after taxes to the total cost of traditional education minus available financial aid. I think it is quite likely that median household income after taxes will drop significantly over the next decade, that the total cost of traditional education will rise significantly, and that the available financial aid will drop significantly. This will drive alternatives to traditional education for a large segment of the population. The "signaling" colleges will remain for the elite, but those just looking to learn employable skills will turn more to non-traditional methods and certifications. Personally, I'd like to see apprenticeship make a comeback.

In one of my businesses--we created, owned, and ran professional conferences all over the country--we used to say that people went to the conferences for three reasons: learning, networking, and vacation. Pretty similar for college. Online/video only deliver one out of three. (Well, maybe one and a quarter for online--the networking is pretty lame.)

Also, it seems that children can't learn language from watching TV. They need interaction. I would not be surprised if this was true, though to a lesser degree, with adult learning.

I'm not going to say that online instruction can't work; however, when students are tired, bored, stressed, or otherwise preoccupied, they may periodically tune out and sometimes need someone to call on them in order to bring them back to the "present moment".

I don't know if online instruction includes two-way video conferencing, where both parties can see each other; but by being able to observe student behavior, it is easier to know when to change the pace of the class or to momentarily switch topics (it tends to keep them on their toes).

It's also important to have one-on-one instruction available for those individuals who are having difficulty grasping the subject matter.

Interesting discussion, and I'd have to agree with the VHS argument not being valid - it's the accessibility part which is different. You don't have to wait for a VHS to be shipped out, or even trawl magazines or video stores to find what you need, it takes only a short amount of time to find it online. All mentioned above by other people....

Having said that, I don't see the classroom disappearing either - too much dependency on group collaboration and the incentive/motivation (or is it just being forced to? :) work by a teacher or their peers. Again all mentioned by other people...

But modern kids (and I'm a secondary teacher) are used to the concept of when they don't know something, just going online and watching/scanning (they don't seem to read :) until they get an idea. Well, the ones with motivation are.
I suppose I'll always see online instruction as a supplement, and a brilliantly useful one at that. The ones with initiative will use the amazing access to resources to improve on their own....
Just my two cents.

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